Management of organizational development and change

Rijal on OD (2015); for Shinawatra University MBA – 2015; Global College International, Kathmandu, Nepal Page 1
GLOBAL COLLEGE INTERNATIONAL
In Affiliation with
Shinawatra University, Thailand
MBA [2015]
Organization Development (OD)
Course Code: MGT 2007 Credit Hour: 1 Teaching hours: 18
Course Brief: This course focuses on organizations and organization theory; strategy,
organization design and effectiveness; fundamentals of organization structure; external
environment; inter-organizational relationship; designing organizations for international
environment; manufacturing and service technologies; organization size and life cycle;
organization culture and ethical values; innovation and change; decision making
processes; and conflict, power and politics. The course emphasizes the application of the
concepts by using the case studies and real life examples.
Course Objective: This course aims at developing in graduates the relevant conceptual
and practical skill competence, ability and willingness with empowerment of your
maturity to visualize new organizational systems, transform existing ones and take
leadership for project management initiatives under changing environment, all as part of
planned change.
More specifically, on completion of this course, the graduates will be able to --
1. correctly understand and use the basic concepts related to OD,
2. transform their ability to analyze facts, recognize organizational culture,
effectiveness, issues related to organization diagnosis, and apply applicable
theoretical and conceptual realities of OD,
3. perform effectively the organizational and environmental analyses,
4. make effective choices of required organization development and change (ODC)
interventions as part of planned change, and
5. contribute ethically in the process of organizational development and
transformation.
In addition to this all, the graduates will have opportunity to improve their interpersonal
and communication skills, problem solving skills, and more importantly, the leadership
skills required to manage the organizations in more competitive and dynamic work
environment.
Course Details: For the simplicity of teaching learning and meaningful classroom
discourses, the entire course has been transformed into five units of learning.
UNIT I: INTRODUCTION
Meaning of organizational development (OD), organizational development and change
(ODC), significance of OD/C in organizations, issues and challenges facing the job of
ODC today, outcomes of effective ODC interventions, evolution of various concepts and
models in OD, system approach to OD and historical development of OD.

UNIT II: DIAGNOSES FOR OD INTERVENTION
Meaning and importance of organizational diagnoses, models of organizational
diagnoses, open system model, diagnosing organizational systems, strategic diagnostic
postulates, methods of organizational diagnoses.
UNIT III: ORGANIZATIONAL CHANGE
Meaning and importance of organizational change, forces of organizational change,
classifications of change, resistance to change, managing change activities, motivating
change in organizations, creating a shared vision, developing and gaining political
support, managing transition, sustaining momentum, creating ODC initiatives,
managerial challenges and implications of organizational change.
UNIT IV: MANAGING PLANNED CHANGE
Meaning, forces, levels and classifications of planned change, managing planned change,
implications of planned change, theories and models of planned change, challenges and
managerial implications of planned change.
UNIT V: THE OD PROCESS
The OD process, OD practitioner skill competence requirements, personal process issues
in OD process, and practicum on OD interventions.
Teaching Learning Methodology
Structured class lectures, case studies, group project works, individual and group
presentation will be used as the dominant methods of teaching learning of this course.
Learning Performance Evaluation Criteria
1. Class participation: 50 marks [10% for final grading]
2. Take home assignments: 50 marks [10% for final grading]
3. Individual/group presentation: 50 marks [10% for final grading]
4. Case studies: 50 marks [15% for final grading]
5. Project work: 50 marks [15% for final grading]
6. Structured examinations: 100 marks [40% for final grading]
Tentative Days/Time of Teaching-Learning
Day Shift: Thursday, 10:30 AM to 2:30 PM [Commencing from July 9, 2015]
Evening Shift: Thursday, 5:45 PM to 9:00 PM [Commencing from July 9, 2015]
Total duration of course delivery: 6 weeks
Expected Academic Honesty
All the graduates attending this course at Global College International are strictly
informed to respect the global spirit and norms of intellectual property rights at all times,
with appropriate acknowledgement of the sources of information used while preparing
for this course, as plagiarism will be considered as an intellectual offence; apply APA
style guidelines for citation and referencing of the learning resources; and provide with
references for additional learning of the materials that they prepare for rest of members of
the learning community.

TABLE OF CONTENTS
UNIT I: INTRODUCTION.................................................................................................4
UNIT II: DIAGNOSES OF OD INTERVENTION…………………………………….21
UNIT III: ORGANIZATIONAL CHANGE…………………………………………….33
UNIT IV: MANAGING PLANNED CHANGE………………………………………..42
UNIT V: THE OD PROCESS…………………………………………………………..73

UNIT I: INTRODUCION
Learning Objectives
1. Understand the meaning and importance of organizational development.
2. Explore the various levels of organizational diagnoses as the foundation of ODC
interventions
3. Learn about the applications, relevance, values, assumptions and beliefs in ODC.
4. Understand the meaning and importance of organizational change and its impact
business.
5. Explain the historical development leading the emergence of the concept of OD.
6. Understand the implications of ODC.
7. Explore about the emerging issues and challenges in ODC in today’s dynamic
global business environment.
1.1. MEANING OF OD
Organization development and change (ODC) stands for promoting a more scientifically
planned approach to organizational development and transformation. Precisely speaking,
it serves for dual functions -- first, it is a professional field of social action in an
organizational setting, and second, it serves as a scientific inquiry to make the
organizational development interventions more evidence-based.
The bottom-line activities included within the scope of OD include team building with
top management in institutions, structural systems management and change, employee
job enrichment and enlargement, and creating and continuing with group and
organizational transformation.
OD is relatively a new field of pragmatic study that formally emerged in the 1950s and
1960s keeping in view the prime objective of improving organizations and people to get
them better, continually. In OD, the starting point is that when the leader identifies an
undesirable situation and seeks to change it. Its focus will be on making organizations
function better leading to total system change. Process orientation remains on action for
achieving results through planned activities. That’s it… there is no unifying theory; it
works on just models of practices. Thus, it may be referred to as an organization-wide
improvement strategy.
Organization development is an effort (1) planned, (2) organization-wide, and (3)
managed from top, to (4) increase organization effectiveness and health through (5)
planned interventions in organization’s “processes”, using behavioral-science knowledge
- Beckhard, 1969.
Organization development is a process of planned change – change of an organization’s
culture from one which avoids an examination of social processes (especially decision
making, planning and communication) to one which institutionalizes and legitimizes this
examination - Burke and Hornstein, 1972.

Organization development is a systematic application of behavioral science knowledge to
the planned development and reinforcement of organizational strategies, structures, and
processes for improving an organization’s effectiveness - Cummings and Worley, 1993.
Organization development is a planned process of change in an organization’s culture
through the utilization of behavioral science technologies, research, and theory - Burke,
1994.
What exactly OD focuses is about creating more conducive institutional culture,
improving the entire institutional processes, and transforming organizational design and
structure – all three to contribute effectively to improve quality of work life in an
organization.
Bruke (1982) has emphasized on improving organizational culture as the target of
planned change as the key to OD intervention. This scholar has argued that change
induces cultural shifts through the fuller utilization of behavioral science technology,
research and theory. French (1969) has placed higher emphasis on long-term interest of
organizational transformation by using consultants. Beckhard (1969) and Beer (1980)
have focused on generic functional process of OD initiated by the top management.
In the words of Edgar Schein, an organization is the planned coordination of the activities
of a number of people for the achievement of some common explicit purpose or goals
through the division of labor and function, and through a hierarchy of authority and
responsibility. Development is the act, process, result or state of being developed - which
in turn, means to advance, to promote the growth, to evolve the possibility or potential, to
further improve, or to enhance something.
This definition emphasizes two key concerns -- i. development may be an act, process or
an end-state, and ii. development means improving something in a continually
coordinated manner.
Keeping in view the concepts shared by these scholars, the term OD should be
understood as a systems approach to organizational behavioral science knowledge
relevant for planned development, improvement or transformation, reinforcement of
structures, people, process and strategies applicable for the improved organizational
effectiveness.
Thus, OD is the act, process or result of furthering, advancing, or promoting the growth
of an organization. In other words, OD may be defined as the collectively planned efforts
initiated by process specialists to help an organization to develop its diagnostic skills,
coping capabilities, linkage strategies -- in the form of temporary and semi-permanent
systems -- and a culture of mutuality. Simply, ODC provides with continuity to OD under
dynamic operating and governing environments.
A planned effort focuses on thinking and planning within and beyond the organizational
process climate and system. Mostly, the job of OD is initiated by process specialists who
have non-biased diagnostic skills -- data collection, processing and interpretation for

enhancing the organization’s coping capabilities -- problem solving, confrontation and
coping. An effective OD intervention also works on linking strategies by attempting to
align individual and organizational goals. To promote the culture of mutuality, an OD
intervention intends to fostering certain values and open and proactive systems that
comprise of openness, confrontation, trust, authenticity, pro-activeness, autonomy,
collaboration and experimentation (OCTAPACE) – these all serve as the key elements of
a vibrant learning organizational system.
More functionally, OD may be defined as a systems approach to establish OD relations,
diagnose the environment, people, processes and structural sets, develop feedback for
interventions, develop and implement interventions, monitor, evaluate and improve the
interventions so as to guarantee quality of work life in organization with sound impact to
the society at large.
1.2. KEY CONSIDERATIONS OF OD
Primarily, there are five key considerations in OD system intervention:
1. OD implies to the strategy, structure, and overall process of entire system. A
change program may be initiated aiming at any level of its strategy, structure or
process.
2. OD is based on behavioral science knowledge and practice related to the micro
concepts including leadership, work design, group dynamics, institutional
communication, and macro concepts including institutional strategy,
organizational design and international relations.
3. OD is primarily concerned with managing planned change.
4. OD is concerned with creation and reinforcement of change.
5. OD is concerned with improving organizational effectiveness by managing its
operation-wide costs and social relationships.
For any OD intervention to take place successfully, some of the key requisites include – i.
top management visioning, ii. continuous empowerment and improvement of learning
process, iii. team-based problem-solving approach, iv. collaborative management, and v.
highly effective work teams.
1.3. IMPORTANCE OF OD
Effective OD intervention in place will result in proactive organizational process climate
and culture conducive for learning organizational systems. Timely and effective
development and change initiatives will result in high level of organization-wide
productivity, improved level of employee job satisfaction as a result of pride of being
associated to such organizations. Similarly, the employee absenteeism and job turnover
rates will come down due to increased level of employee loyalty towards the work teams,
management and rest of stakeholders. Finally, these all results will further contribute to
organization’s institutional image in the society where it operates.
1.4. SIGNIFICANCE OF KNOWLEDGE OF OD
At the crux, effective OD knowledge and its intervention is highly relevant to address the
needs of organizational transformation whereby maintaining organization’s upper footage

in changing context of globalization, rapid evolution of information and technology and
taking benefit from its application in organizations, and pushing up managerial
innovations in organizations by transforming the traditional organizational structure and
designs into newer and more innovative forms, creating more functional alliances, and
maintaining robust communication and other functional communication within and
beyond organization.
1.5. OD VALUES, ETHICS & APPLICATIONS
OD Values: The entire functioning of a well managed OD interventions rely on basically
three value systems – i. humanistic values, ii. optimistic values, and iii. democratic
values.
Humanistic values in the sense that any OD intervention is initiated by creating a
functional human interface for the implementation. The socio-ethical considerations are
well thought up on before initiating any structural or procedural change. In dealing with
people, groups and organizational system’s approach thorough consideration is made
whether the intervention has any adverse effect upon the people working in that
organization, or if the intervention will have such effects upon any group of stakeholders
even outside the organization.
Each intervention for change is initiated with an optimistic vision that change will bring
in positive changes and will have no or very less adverse effect to the entire
organizational system and its stakeholders. The concept of OD is, in fact, deeply rooted
with the thought patterns that research, innovation and development are positive carriers
of organizational transformation and OD relies on these elements. Precisely, OD relies on
the concept of positive transformation with a positive hope for development.
For any OD interventions to take place in an organization, it should be initiated as a
collective mission rather than coming through one or two single individuals to make
things turn around. The democratic values in OD make it a more collective mission and
deeply rooted within the thought patterns of each individual and his or her expectations
for organizational change.
The above stated are the organizational values of OD intervention. Equally important is
the practitioner’s values for OD intervention. An OD practitioner is expected to work
being guided by a number of specific value systems which are grounded on effectiveness
and efficiency to produce cost-effective results with lasting impact, fostering open
communication with all agencies having common concern on change mission,
empowering people, group and organizational systems, working for enhancing the
organization-wide productivity, and helping to promote organizational participation in
different social avenues for impacting causes.
More thematically, Bennis (1969) has proposed with a set of six normative goals that an
OD interventionists should share. These include:
1. Improvement in interpersonal competence.

2. A shift in values so that human factors and feelings come to be considered
legitimate.
3. Development of increased understanding between and within work groups in
order to reduce tensions.
4. Development of more effective ‘team management’ that is, the capacity for
functional groups to work more competently.
5. Development of better methods of conflict resolution. Rather than the usual
bureaucratic methods which rely mainly on supervision, compromise, and
unprincipled power, more rational and open methods of conflict resolution are
sought.
6. Development of more organic rather than mechanical systems. This is a strong
reaction against the idea of organizations as mechanisms which managers ‘work
on’ like pushing buttons.
Similarly, Beckhard (1969) has prescribed several assumptions regarding the nature and
functioning of organizations held by OD interventionists. A few of them are as follows:
1. The basic building blocks of the organization are work groups or teams. Thus, the
basic unit of intervention should be the teams; not the individuals.
2. A more relevant goal of change is to reduce the inappropriate competition
between the parts of the organization and the development of a more collaborative
condition.
3. Decision-making in a healthy organization is located where the sources of
information are rather than in a particular role or level of hierarchy.
4. Organizations, their units, subunits, and individuals continuously manage their
affairs against goals. Controls are interim measurements, but not the basis of
managerial strategy.
5. One goal of a healthy organization is to develop generally open communication,
mutual trust, and confidence between and across levels.
6. ‘People support what they help create.’ People affected by a change must be
allowed to have active participation and a sense of ownership in the planning and
conduct of the change.
These all values have direct implications on dealing with people, groups and organization
on its way to transformation and prosperity.
Value-Driven Functions: Use OCTAPACE Situations in Sales/Marketing Functions
As suggested by French, Bell, and Vohra (1999), following are some of the
organizational value-laden examples of the application of OCTAPACE situations in
dealing with sales or marketing functions of an institution:
Openness
1. Inform the superiors in advance about the likely shortfall in targets to be achieved.
2. Communicate in time the market representative provided feedback to the
concerned product or service management team on effectiveness of the strategies
deployed.
3. Inform to the distribution units or systems regarding any outstanding or expiry of
products and services.

Confront – The Problem
1. Discuss with distribution function/channels regarding any non-availability of
stocks in any segment of the markets.
2. Defend the product/service-wise targets set based on potential of each market and
its segments.
3. Appeal or request to the R&D division for cost reduction of products/services in
comparison with competitors’ pricing strategies.
Trust
1. Restrict improper utilization of information and data available on the
product/service marketing strategies.
2. Appreciate the representatives for any suggestions made by them in regards with
product improvement, strategic change, etc.
3. Seek for delivery of the products/services as per the agreed schedule of supply.
4. Sales managers should follow-up on actions or problems as reported by the sales
force in the markets.
Authenticity
1. Sales managers should establish procedures for experts.
2. Avoid any sort of false or exaggerated sales forecast or production planning for
new products.
3. Set and apply more consistent criteria for selecting High Fliers/Experts for
investments.
4. Implement in-clinic performance as per the guidance of the superiors.
Proactive move
1. Prepare a focused Doctors’ list for new product or service to be launched.
2. Prepare contingency plans to maintain sales targets to be achieved, and to check
the counter-variations.
3. Initiate effective actions to reduce the expiry/breakage costs.
4. Recommend aggressive strategies to increase the market share of the
products/services.
Autonomy
1. Allow line managers to take decisions on investment on experts within the
framework of the policy.
2. Respect the rejection of new combination of goods and services by R&D
department.
3. Make realistic targets based on last year/business cycle performance supported by
the market/s.
4. Improve the quality of inputs/resources to the field by the help of market planning
team.
Collaborations
1. Departmental heads should identify the developmental needs of the sales force
with emphasis on their training needs.

2. Provide necessary inputs to the sales administration for quicker settlement of the
grievances of the field employees.
3. Follow-up joint accountability with employees of the concerned departmental
goals to remove fear of losing points in the final appraisal.
4. Initiate joint field working with the representatives.
Experimentation
1. Encourage newer marketing strategies for introducing newer products or services.
2. Identify suitable training or developmental programs for sales force and
effectively plan and administer them.
3. Deploy newer methods for capturing the field-wide effectiveness of the sales
representatives.
Ethics in OD: ‘Promise only what you can deliver’ is one of the biggest ethical roots in
OD intervention from the provider’s perspective. False claim and false promises will
finally damage the entire credibility and relationship.
A caring OD interventionist has to customize the services as per the requirements of the
client. The interventionist has to show him or herself in the form of ‘person selling work
is person doing the work’ to prove that the intervention is worth implementing. Thorough
teaching of the client on how to engage in OD will result in more effective impact and
relationship.
‘Service first’ should be the key mantra of an OD interventionist. An OD interventionist
should not try to sell his/herself short for fads; should try to figure out what the client is
looking for, or what they are willing for. Insourcing of solution and training leadership
for solution may not always be a good idea. An OD interventionist has to provide a first
service of external touch that binds with relationships.
Cost effectiveness has to be considered at every instance. Any extra cost to the client is
always an extra burden to his/her customers. Thus, an OD interventionist has to be
concerned on making services more cost effective for the clients.
Other equally importance ethical considerations may include no forceful change
intervention; create and promote non-collusion behavior; become true and honest to the
source/s of problems; give total credit of changes to the client; take on only those works
that you can handle; maintain your worth at every instance by noble deeds; remember!
Your whole system is the client only.
Applications of OD: The concept of OD is applicable for at least three levels of an
institutional system – individuals, groups, and organizational system.
Redesign of job, management of employee behavior, transformation of individual skill
competencies, etc. may be considered as applications of OD at individual level.

At group level, the OD interventions may be applicable for many purposes including
team development, group processes improvement, behavioral change communications
(BCC), conflict mitigation, promoting team leadership, etc.
The organizational level OD applications may include revisits on organizational thrusts,
promoting cultures, making technological changes, initiating intergroup interventions,
revisiting the organizational priorities and values.
1.6. EVOLUTION OF OD
Current practice in organization development is strongly influenced by those five
backgrounds and by the trends shaping change in organizations. The laboratory training,
action research and survey feedback, and participative management stems of OD are
evident in the strong value focus that underlies its practice. More recent results indicate
that the quality-of-work-life and strategic change backgrounds have greatly improved the
relevance and rigor of OD in practice. They have added financial and economic
indicators of effectiveness to OD’s traditional measures of work satisfaction and personal
growth.
Today, the field is being influenced by globalization and information technology trends
as well. OD is carried out in across the countries and among many high performing
organizations on worldwide basis. This is generating a whole new set of interventions as
well as adaptations to traditional OD practices. In addition, OD must adapt its methods to
the technologies being used in organizations. As information technology continues to
influence organization environments, strategies and structures, OD needs to manage
change processes in cyber space as well as face-to-face. The diversity of this evolving
discipline has led to tremendous growth in the number of professional practitioners, in the
kind of organizations evolved in OD, and in the range of countries within which OD is
practiced.
The expansion of the OD Network http://www.odnet.org, which began in 1964, is one
indication of this growth. It has grown from 200 members in 1970 to more than 3,700 OD
practitioners today. At the same time, Division 14 of American Psychological
Association, formerly known as Division on Industrial Psychology, has changed its title
to the Division of Industrial and Organizational Psychology. In 1968, the American
Society of Training and Development set up an OD division, which currently has more
than 2,000 members. In 1971, the Academy of Management established Division of
Organization Development and Change, which currently has more than 2,000 members.
Pepperdine University, http://bschool.pepperdine.edu, Bowling Green State University,
http://www.bgsu.edu, and Case Western Reserve University, http://www.cwru.edu,
offered the first degree program in OD in 1975 and Case Western Reserve University
began the first Doctoral programs in OD. Organization Development is now taught in
graduate and undergraduate levels in a large number of universities across the world.
In addition to the growth of professional societies and educational programs in OD, the
field continues to develop new theorists, researchers and practitioners who are building

the works of the early pioneers extending it to contemporary issues and conditions.
Included in the first generation of contributors are Chris Argyris who developed a
learning and action science approach to OD, Warren Bennis who tied executive
leadership to strategic change, Edga Schein who continues to develop process approaches
to OD, including the key role of organizational culture in change management, Richard
Beckhard, who focused attention on importance of managing transitions, and Robert
Tannenbaum who continues to sensitize OD to the personal dimension of participants’
lives.
Among the second generation contributors are Warner Burke, whose work has done
much to make OD a professional field, Larry Greiner who has brought the ideas of power
and evolution into mainstream OD, Edward Lawyer III, who extended OD to reward
systems and employee involvement, Anthony Raia and Newton Margulies who together
have kept out attention on the values underlying OD and what those mean contemporary
practice, and Peter Vill and Craig Lundberg continue to develop OD as practical science.
Included in the newest generation of OD contributors are Dave Brown whose work on
action research and development organizations has extended OD into community and
societal change. Similarly, Thomas Cummings’ work on sociotechnical systems, self
designing organizations and trans-organizational development has led OD beyond the
boundaries of single organization to groups of organizations and their environments.
Additionally, Max Elden’s international work in industrial democracy draws attention to
the political aspects of OD. William Passmore and Jerry Porras also have done much to
put OD on a sound research and conceptual base. Peter Block has focused attention on
consulting skills, empowerment processes and reclaiming individuality.
Others making important contribution to the field include Ken Murrel and Joanne
Preston, who have focused attention on the internationalization of OD. Sue Mohrman and
Gerry Ledford have focused on team based organizations and compensation. David
Cooper Rider has turned the world attention towards the positive aspects of
organizations. These academic contributors are joined by large number of internal OD
practitioners and external consultants leading at the fore fronts of organizational change.
Many organizations undertake a wide variety of OD efforts. In many cases, organizations
have been at the forefront of innovating new change techniques and methods as well as
new organizational forms. Larger corporations that have engaged in organizational
development include General Electric, Boeing, Texas Instruments, American Airlines,
DuPont, Intel, Hewlett Packard, GTE, John Hancock Mutual Life Insurance, Polariod,
Ralston Purina, General Foods, Procter and Gamble, IBM, TRW Systems, Bank of
America and Cummins Engine. Traditionally, much of the work was considered
confidential and not publicized. Today, however organizations have gone public with
their OD efforts, sharing lessons with others.
OD work is being done in schools, communities and local, state and federal governments.
A recent review of OD projects was directed primarily at OD in Public Administration.
Extensive OD work was done in the armed services including the Army, Navy, Air Force

and Coast Guard, although the OD activity and research has declined significantly with
the reduction of the size of military. Public schools began using both group training and
survey feedback relatively early in the history of OD. Usually, the projects took place in
suburban middle schools, where stress and strains of urban environment were not
prominent and ethnic and socioeconomic development between and consultants and
clients were not high. In more recent years, OD methods have been extended to urban
schools and to colleges and universities.
Organization development has been increasingly internationalized. It has been
extensively applied in Canada, Sweden, Norway, Germany, Japan, Australia, Israel,
South Africa, Mexico, Venezuela, The Philippines, China, Hong Kong, Russia, New
Zealand and the Netherlands. In fact, there is not a single country in this world, which
does not apply OD in its mission to public sector reform and transformation. Nepal is
currently undergoing a massive nation-wide reform.
1.7. A SYSTEMS APPROACH TO OD
The OD approach to change treats the organization as a system. A system is an orderly
group of logically related parts, principles and beliefs. Alternatively, it is a grouping or
arrangements that relate or interact with each other in such a way to form a whole system.
Thus, this approach has the following characteristics:
1. OD serves as a total view, not a limited view.
2. OD considers the relationship between the organization and the environment and
the internal dynamics of the organization.
3. OD focuses on transformation of teams -- temporary, semi-permanent and
permanent through continuous improvement.
4. Interpersonal communication is one of the central aspects of OD interventions in
place.
5. The individual development dimensions of OD interventions include self
awareness and self acceptance by developing individual skills, knowledge and
ability to lead the change initiatives in organizations.
1.8. HISTORICAL DEVELOPMENT OF OD
The concept of OD of the present day practice emerged from five major evolutionary
backgrounds, known as stems -- i. laboratory training background, ii. action research and
survey feedback background, iii. participative management background, iii. productivity
and quality-of-work life background, and iv. strategic change background.
The first stem was the development of National Training Laboratories (NTL) that
initiated for the development of training groups known as T-groups. The second stem
emerged out of classical action research works by social scientists who were interested to
apply research in managing institutional change. The third step is related to Rensis
Likert’s application of participative management used to enhance the organizational
effectiveness achieved through organizational restructure and design. The fourth stem is
related to gaining quality of work life and productivity. Finally, the fifth and the latest
stem of development advocates on strategic change and organizational transformation.

1. Laboratory Training Background: In the summer of 1946, Kurt Lewin and his
associates working at Research Center for Group Dynamics at the Massachusettes
Institute of Technology (MIT) were asked by the Connecticut Interracial Commission
and the Committee on Community Interrelations of the American Jewis Congress for
help in research on training community leaders. As it applies with the concept of working
with small and unstructured training groups in which the participants learn through
interaction with the group members, a workshop was developed, and community leaders
were brought together to learn about leadership and to discuss upon different problems
and challenges.
As an integral part of T-group intervention, every day the researchers sat with the training
group participants and discussed with the social leaders on the basis of various behaviors
and group dynamics they had observed. Though they were reluctant in the beginning,
gradually the community leaders started to take it positively when asked to sit for
feedback sessions. In this way, the first T-group was formed and used for exploring their
personal behaviors and group dynamics, the prevailing problems and other challenging
issues. From this first T-group experiment, the researchers drew two key conclusions – i.
the feedback about the group interaction was a rich learning experience, and ii. the
process of group building had potential of learning that could be transferred to ‘back-
home’ situations.
As a highly positive result of this experiment, the Office of Naval Research and the
National Education Association provided financial support to form the National Training
Laboratories, and Gould Academy in Bethal, Maine, was selected as a site for further
work and since then Bethal has played important part in NTL. The first Basic Skill
Groups were offered in Summer, 1947. As a result of success of this intervention, the
Carnegie Foundation financially supported in 1948 and 1949 giving a permanent program
for NTL within the frameworks of National Education Association.
An experimental shift appeared in the 1950 as attempts were made to have T-groups in
the morning and cognitive-skill groups (A-groups) in the afternoon. However, the staff
found that high level of carry-over from the morning sessions turned the afternoon A-
groups into T-groups, despite the resistance of the afternoon staff members, who were
committed to cognitive skill development. This all supported for the commencement of a
new decade of learning experimentation and frustration, especially in the attempt to
transfer skills learned in the T-group setting to the ‘back-home’ situation.
As a result of the T-group interventions, at least three trends emerged in 1950s – i.
emergence of regional laboratories, ii. expansion of summer program sessions to year-
around sessions, and iii. expansion of T-groups into business and industry, with NTL
members becoming increasingly involved with industry programs. Later, the application
of T-group techniques in organizations gradually evolved as a means of effective team
building and making work groups more effective in accomplishing their assigned tasks.
For further exploration of managerial implications of the T-groups, main credit goes to
McGregor and Beckhard. Douglas McGregor at Union Carbide of Herbert Shephard and

Robert Blake at Esso Standard Oil, now Exxon, and McGregor and Richard Beckhard at
General Mills used these training groups as more effective means of ‘organization
development’, and equally important for employee and industrial relations.
2. Action Research and Survey Feedback Background: In 1940s John Collier, Kurt
Lewin, and William Whyte were involved in the second movement of development
leading to the emergence of OD as a practical science that heavily relies on action
research and survey feedback. The study team identified that the research needed to be
closely linked to the actions of organizational members so as to manage change more
effectively.
As part of working strategy of the study team a collaborative effort was made by the
organizational members and the team social scientists to collect relevant research data
about organization’s functioning to analyze it for the causes of problems and corrective
measures to be taken so as to address the problems more effectively. After
implementation of the corrective measures suggested through research, further research
was conducted to assess results. Such cycle continued with a number of repetitions.
The action research results appeared to be instrumental in two-fold – i. the organizational
members who participated as the units of study in the action research were able to use the
research results on themselves to guide their managerial action for organizational
development and change, and ii. the social scientists were able to study the entire process
to derive new knowledge that could be used elsewhere.
The key components of the action research included i. systematic collection and analyses
of survey data, and a more robust feedback system to feed the information back to
organizations, ii. closer monitoring of the effects of the implementation of the feedback
and tracking the effects, and iii. closer alignment of research with implementation process
as a continued intervention. Figure 1.1 presents with a set of interrelated activities
performed to accomplish the task of action research as a system’s approach.
Figure 1.1: Process of Action Research
1
Preliminary
Diagnoses
3
Data
Feedback
4
Exploration
of
Information5
Action
Planning
6
Action
7
Evaluation
2
Data
Gathering

As presented in figure 1.1, action research-based OD intervention comprises of at least
seven activities performed in a continually cyclic manner. These actions follow a number
of coherent steps that involve preliminary diagnoses, data gathering by observation, data
feedback or verification and confirmation, exploration of information for decision
making on change, action planning for change, implementation of change initiative,
evaluation of the effects of change initiatives, and repeating the cycle forever, always.
Lewin has claimed that there is no action without research, and no research without
action.
A few of the pioneering and notable action researches of that time included – i. the work
of
Lewin and his graduates at the Harwood Manufacturing Company, ii. the classic research
by Lester Coch and John French on overcoming resistance to change; this study
supported in a great deal in bringing change in action through team management skills,
iii. Whyte Hamilton’s study on Chicago’s Tremount Hotel, and iv. Collier’s efforts to
apply action research techniques to improving race relations when he was the
Commissioner of Indian affairs from 1933 to 1945. These all studies contributed in a
great deal to establish action research as an integral element to effective organizational
change. Today, action research serves as a backbone of most of the OD interventions in
organizations.
Following the death of Lewin in 1947, his Research Center for Group Dynamics at MIT
moved to Michigan State University and joined with the Survey Research Center team as
part of Institute of Social Research. The team was headed by Rensis Likert, a well known
behavioral scientist of the era. By that time, Likert had already pioneered in developing
scientific approaches to attitude surveys. His doctoral dissertation at Columbia
University, “A Technique for the Measurement of Attitudes,” which was crafted on his
very popular five-point rating scales known as Likert’s Rating Scales.
In an early study of Institute of Social Research, Likert and Fayol Mann administered a
companywide survey of management and employee attitudes at Detroit Edison taking a
period of over two years beginning in 1948. Three sets of data were developed – i.
viewpoints of 8,000 nonsupervisory employees about their supervisors, promotion
opportunities, and work satisfaction with fellow employees, ii. similar responses from
first-line and second-line supervisors, and iii. information from higher levels of
management.
The feedback process that evolved through this research was an ‘interlocking chain of
conferences.’ The major findings of the survey were first reported to the top management
and then transmitted throughout the organization. The feedback sessions were conducted
in task groups, with supervisors and their immediate subordinates discussing the data
together. Although there was hardly any research-based evidence already established, the
research team intuitively believed that this was a powerful process for initiating change in
organizations.

In 1950, eight accounting departments asked for a repeat of the survey, which ultimately
generated a new cycle of feedback meetings. Out of these departments, feedback
approaches were used in four departments with varying methods of administration, with
two of the remaining departments receiving feedback only at the departmental level. As a
result of frequent change in key personnel in rest of two departments, nothing was done.
Another follow-up study revealed more significant and positive changes. For example,
the employee job satisfaction was higher in departments that received feedback compared
to that of non-receiving ones. Following those findings, Likert and Mann derived several
conclusions about the effects of survey feedback on organizational change. This led to
extensive application of survey feedback methods in a variety of settings. The researchers
used common pattern of data collection, data feedback, action planning, implementation
and follow-up data collection in both action research and survey feedback.
3. Participative Management Background: The advent of laboratory-based T-group
research stem and action research/survey feedback stem opened up a number of
managerial implications with advancement in thinking on intellectual capital dimension
of an organization. These studies were conducted with a belief that a human relations
approach represented a one-best-way to manage organizations. This belief was further
exemplified in a research that associated Likert’s Participative Management, widely
known as ‘Likert’s System Four’ style with organizational effectiveness. The alternative
management characters in organizations envisioned in Likert’s System Four types of
management included i. exploitive authoritative systems (System 1), ii. benevolent
authoritative systems (System 2), iii. consultative systems (System 3), and iv.
participative group systems (System 4). So, what’s the difference between these all?
Subsequent discourses provide some information to address this query.
Exploitive authoritative systems (System 1): The leaders and managers of this character
exhibit an autocratic, top-down approach; employee motivation is based on the effect of
punishment, coercion and occasional rewards; communication is primarily one-way,
downward with hardly some evidence of lateral interaction and teamwork; decision-
making and control is heavily centralized; these all cause for only a little or mediocre
level of performance.
Benevolent authoritative systems (System 2): With hardly some exceptions, System 2
characters are almost similar to that of System 1. Management is more paternalistic in
this system; employees are allowed a little more interaction, communication, and
decision-making but within the premises defined by the management. Employee
performance is slightly better than that of System 1 management.
Consultative systems (System 3): These systems increase employee interaction,
communication and decision-making. Though the employees are consulted about the
problems and required decisions, management still reserves for making final decision-
making. Employee productivity and motivation is fairly good and employees are fairly
satisfied with the organization and its leadership.

Participative group systems (System 4): These are almost opposite of System 1 as the
entire working methods are designed around group methods of decision-making and
supervision. This system fosters a high degree of member empowerment by means of
involvement and participation. There is wider evidence of work group involvement in
setting goals, making decisions, improving methods, and appraising results. There is high
evidence of all-directional communication and organizational decisions are linked
throughout all departments and operational units by overlapping group membership.
System 4 is witnessed with high level of productivity, quality of work life and member
satisfaction.
4. Productivity and Quality-of-Work Life (QWL) Background: The development of
productivity and QWL background in OD has primarily happened in two phases of
evolution. The first phase of development is described by the original projects developed
in Europe in the 1950s and their emergence in United States in the 1960s. Based on the
research of Eric Trist and his associates at Tavistock Institute of Human Relations in
London, the early practitioners in UK, Ireland, Norway and Sweden developed the work
designs aimed at better integrating technology and people. These programs provided with
ample room for joint participation of the union and management making sure that
employee is given with high discretion in work design, task variety and feedback on
operational results.
In addition to bringing in technology at workplace, the concept of QWL also brought
forth the formulation of self-managed work groups as a new form of work design. The
groups were composed of multi-skilled workers exercising ample amount of autonomy to
design and manage their own task performances.
Soon after, these programs migrated to United States with adoption of a variety of
concepts and techniques making it a new blend rather than taking them purely as
European models. Then QWL was first defined as people’s reaction to work in respect
with individual outcomes, for example, job satisfaction and mental health as the entire
concept of QWL was focused on human dimension and its consequences.
Further, it was defined as an approach or method as it was considered as system of
scientific techniques and approaches used for improving work. Job enrichment, self
managed teams, and labor-management committees came in action as a result of
continued focus on QWL. The then corporate conglomerates including General Motors
used this concept extensively and the relevance was further testified.
The excitement and popularity of the concept of QWL in US lasted till 1970s, as other
equally pressing issues, such as inflation and energy costs, diverted national attention.
From 1979 onwards, the second phase of QWL started with focus on low cost and high
quality philosophy, basically from the Japanese origin of total quality management
(TQM) practices in management.
As a result, the original school of thought on QWL was revisited with the emphases on
number of other features, such as job satisfaction, reward system, work flows,

management styles, physical work environment management, operational focus,
economies of scale, low cost strategy, and so on.
Today, we have quality circles, quality monitoring, confirmation and improvement
programs, and proper process monitoring and feedback systems to constantly improve
every type of operational process in organizations.
5. Strategic Change Background: The most recent influence on OD interventions is the
strategic change background that evolved along the realization of the importance and
influence of macro constructs of organizational management. As organizations and the
environmental forces surrounded them became more and more complex and
unpredictable, the scales of intensity and diversity of organizational increased
significantly. Strategic change stem of OD intervention came in existence to address this
need.
Practically, strategic change involved improving the alignment among an organization’s
environment, strategy, and organization design. Strategic change interventions include
the efforts to improve both the organization’s relationship to its environment and the fit
between its technical, political and cultural systems. Need for strategic compliance was
further reinforced as a result of regulatory compliance requirements, technological
breakthrough, and globalization of human resource practices.
One of the first applications of strategic change was Richard Beckhard’s use of open
systems planning. In this system, Beckhard has proposed that based on the organization’s
core mission, the differences what the environment demanded and how organization
responded could be reduced to improve performance. Following this concept, many
change experts have proposed a variety of large-scale or strategic change models by
recognizing the need of change at different levels of organization including its core
values and cultural dimensions.
The strategic change background has significantly influenced OD interventions. For
example, implementing strategic change requires OD practitioners to be familiar with
competitive strategy, finance, marketing, team building, action research, and survey
feedback. This all demanded more qualified, dynamic, and skilled as well as more
futuristic OD interventionists.
Unit-end Exercise
1. Define OD and discuss its importance and functional relevance in organizations
today.
2. Do you think the concept of OD is applicable for only the organizations that are
already in business? Discuss.
3. Elaborate with relevant institutional examples of the key considerations of OD.
4. OD in action may be considered as a behavioral science-based intervention in an
organization. Comment.
5. Discuss briefly the cost and benefits of OD interventions in an organization.
6. How do you relate the concepts learning organization and OD interventions?

7. Discuss briefly the OD values, their implications and different levels of
applications of OD values in organizations.
8. As an OD interventionist, how would you like to make your services more
ethical? Discuss.
9. Discuss briefly the system approach to OD and explain its relevance in
organizational change and development.
10. Present a brief account of various evolutionary insights of OD as discipline
governing institutional transformation.
11. Briefly discuss the various stems of backgrounds of the development of OD as an
applied science.

UNIT II: DIAGNOSES FOR OD INTERVENTION
Learning Objectives
1. Assess the environment posing organizational development.
2. Understand the significance and various technical aspects and process of
organizational diagnoses to initiate relevant OD interventions.
3. Perform organizational and environmental diagnoses in real-life ODC
intervention cases.
2.1. DIAGNOSING THE ORGANIZATIONS
Preliminary understanding of basic concepts before diagnoses
I. What is Diagnosis?
 When does diagnosis occur?
 What is diagnosis?
 Are we there to cure a symptom?
 What is the underlying value of OD?
 Explain how the “medical model” of consulting can get mixed up with OD.
II. Need for Diagnostic Models
 Why are models important?
III. Open Systems Model
 Explain the open systems model
 What are the major parts of an open systems? And what holds each of these parts
together?
 What are boundaries? And what is equifinality?
 What is alignment?
IV. Diagnosing Organizational Systems
 Units of analyses in organizations.
For example:
1. What are the three major levels of any organization, which we will refer to as units of
analyses?
2. What is the relationship among these units? Say, does the organization impact
individuals or vice-versa? To what extent does an individual unit of analysis impact
the others?
3. Can we go across levels of analyses when conducting research? Say, can we study
organizational effectiveness and presume that the findings are applicable to the
individual level? When IBM was at its all time best, was every employee at his/her all
time best?
4. What might the practitioners diagnose at the organizational level?
5. What might the practitioners diagnose at the group level?
6. What might the practitioners diagnose at the individual level?
7. How would you determine these areas for improvement?
8. Why are OD practitioners sought?

9. What methods would we use to diagnose these areas for improvement or change?
10. When diagnosing an organization, groups, or individuals, what must we look for?
2.2. WEISBORD’S SIX-BOX MODEL
To perform organizational diagnoses in a more holistic manner, Weisbord has presented
with a more pragmatic model of inquiry having focus on as many as six areas of
assessment – 1. purpose, 2. relationships, 3. leadership, 4. structure, 5. extent of helpful
mechanism, and 6. rewards – known as boxes of analyses, as presented in figure 2.1.
In the first box, as presented in figure 2.1 below, Marvin Weisbord has suggested a
simplified understanding that assessment of organization’s purpose includes knowing
about its mission, vision, objectives, goals and development and business strategies. This
assessment makes clear about the firm’s reason of existence, intended business or service,
expected market position occupancy of the firm and existing business realities that the
firm has gained. This is all about knowing the purpose of the firm.
Figure 2.1: Weisbord’s Six-Box Model
In the box second, we have to assess the existing team structure, power and position
exchanges, patterns of communication, connecting and operating technologies in use, and
leader-member relationships within team structures.
In the box three, we assess the entire organizational leadership and its effectiveness in
terms of trustworthiness among the members across the departments, leadership
orientation on people and productivity, vision for success, expected external support for
organizational transformation.
E N V I R O N M E N T
PURPOSES
Q1. What business is the
firm in?
RELATIONSHIPS
Q2. How do they
manage conflict among
people, and also with
the technologies?
HELPFUL MECHANISMS
Q5. Have they adequately
coordinated the operating
technologies?
REWARDS
Q6. Do all needed tasks
have incentives?
STRUCTURE
Q4. How do they divide
up the work?
LEADERHIP
Q3. How does someone in
this organization keep the
boxes in balance?
E N V I R O N M E N T
E
N
V
I
R
O
N
M
E
N
T
E
N
V
I
R
O
N
M
E
N
T

Equally important component of the preliminary organizational diagnosis is to assess the
nature and content of job design, structuring, division and allocation of resources across
the operating units and corporate center. Such an assessment helps for the identification
of organization’s immediate change and developmental needs. Wisebord’s box four
serves for this purpose.
In the box five of organizational assessment, we need to assess the available information
system and operating technologies and their effectiveness in terms of coordination. We
have to check how the available technologies can be adequately coordinated so as to
make each unit capable and accessible to take benefit of such technologies for improving
the overall organizational operating system at large.
Finally, assessment of the existing reward and punishment system and its effectiveness in
motivating each task performed by all units of the organization is another equally
important dimension of preliminary diagnosis of the organization, as outlined in the sixth
box of assessment.
On top of these six boxes, we also have to see from the macro environmental perspectives
so as to make a firm understanding about the existing national political legal, socio-
cultural and economic frameworks which govern the entire business system. Equally
important is to assess the technological, broad demographic and global contextual
developments and changes outside the organization and sometimes beyond the countries
of its operation. Such an assessment is instrumental to identify the likely environmental
support as well as their probable resistances against the firm.
We must ask TWO questions for everything while performing diagnoses:
1. Are the arrangements and processes called for by the formal system correct for
each box?
2. Are the arrangements and processes developed by the informal system correct
for each box?
2.3. LEVEL-WISE STRATEGIC DIAGNOSTIC POSTULATES
Basically, organizational diagnoses comprises of systematic observation of overall
organizational process climate and behavioral exchanges at least there levels – individual,
group and organizational system at input and process transformation level and also
observation of end-results and outcomes of the results at output level. Study of
organizational behavior (OB) exchanges provides with better understanding of such
insights. A systems model of OB comprises of the systematic portray of various
behavioral exchanges of behavioral constructs at individual, group and organizational
systems levels so as to assess the impact of such exchanges on expected organizational
outcomes (Robbins, Judge, & Sanghi, 2009). Figure 2.2 best illustrates the relationship
between various dependent and independent constructs at different levels of analyses.
Here, as presented in figure 2.2, the basic assumptions in OB comprise that a more
rationalized exchange or execution of any of these variables at each level will have
positive impact on functioning of rest of the variables in all levels and finally such a

system will yield the highest level of institutional productivity, employee job satisfaction,
reduced level of absenteeism and turnover of the employees, and increased institutional
goodwill and image as the expected OB Outcomes.
Organizational behavior can be viewed from different levels of analysis. At one level, the
organization can be viewed as consisting of individuals working on tasks in the pursuit of
organizational goals. A second level of analysis focuses upon the interaction among
organizational members as they work in teams, groups and departments. Finally,
organizational behavior can be analyzed from the perspective of the organization as a
whole system.
Figure 2.2: Systems approach to organizational behavioral exchanges
Adapted from: Robbins, Judge, & Sanghi (2009). Organizational Behavior. (13th
ed.). p.
37.
Basically, the analyses of organizational behavior is performed at three levels of human
input and transaction leading to organizational outcomes as the collective results of
Individual Level Variables
Personal demography
Biographical characteristics
Values and norms
Attitudes
Personality
Perception
Skill competence
Learning
Individual decision-making
H
u
m
a
n
I
n
p
u
t
s
Motivation
Group Level Variables
Communication
Work groups
Work teams
Interpersonal conflict
Group decision-making
Leadership
Systems Level Variables
HR policies/practices
Structure and design
Change and development
Organizational culture
Work stress
Power and politics
Strategic
thrusts
Change or
Transformation
Expected OB Outcomes
Increased productivity
Increased job satisfaction
Decreased turnover
Decreased absenteeism
Feedback
Corporate
Citizenship

behavioral exchanges at each level of OB system. The study of individual characteristics,
interpersonal relationship, group dynamics, intergroup behavior, and organizational
systems level operations’ analyses are the key levels of analyses in OB.
The human input level analysis specializes on how the improvement of individual human
characteristics including interpersonal characteristics influences the rest of the exchanges
or transformation leading to desired institutional outcomes.
Organizational behavior can be studied in the perspective of individual members of the
organization. This approach to organizational behavior draws heavily on the discipline of
psychology and explains why individuals behave and react the way they do to different
organizational policies, practices and procedures.
Within this perspective, psychologically based theories of learning, motivation,
satisfaction and leadership are brought to bear upon the behavior and performance of
individual members of an organization. Factors such as attitudes, beliefs, perceptions and
personalities are taken into account and their impact upon individuals’ behavior and
performance on the job is studied.
Similarly, the transformational level analyses studies the impact of group dynamics and
systems approach to institutional development and leadership affecting its desired
outcomes.
People rarely like to work independently in organizations. Rather, they have to
necessarily work in coordination to meet the organizational goals. This frequently results
in people working together in teams, committees and groups. How do people work
together in groups? What factors determine whether group will be cohesive and
productive? What types of tasks could be assigned to which groups, and of what
composition? These are some of the questions that can be asked about the effective
functioning of groups in organizations. An important component of OB involves the
application of knowledge and theories from social psychology to the study of groups in
organizations.
Finally, outcome level analyses attempts to establish the direction and magnitudes of each
OB outcome achieved as a result of rationalized input and transformation system within
the organization.
Some OB researchers take the organization as a whole as their object of study. This
macro perspective on OB draws heavily on theories and concepts from the discipline of
'sociology'. Researchers seek to understand the implications of the relationship between
the organization and its environment for it functional effectiveness. Emphasis is placed
upon understanding how organizational structure and design influences the effectiveness
of an organization. Other factors such as the technology employed by the organization,
the size of the organization and the organization's age are also examined and their
implications for effective organizational functioning are explored.

These different perspectives on the study of OB are not in conflict with one another.
Instead, they are complementary. A more complete understanding of the nature of
organizations and the determinants of their effectiveness requires a blending of
knowledge derived from each perspective.
In the case of OD intervention, such levels of analyses will slightly altered. In fact, there
are three levels of organizational analyses to be used while performing the organizational
diagnoses – i. organizational level diagnoses, ii. group level diagnoses, and iii. individual
level diagnoses. Following are the key elements of analyses:
i. Organizational Level Diagnoses
Inputs
1. What is the company’s general environment?
2. What is the company’s industry structure?
Design Components
3. What is the company’s strategy?
4. What are the company’s technology, structure, measurement systems, and
human resources systems?
5. What is the company’s culture?
Outputs
6. How is financial performance measured?
7. How is efficiency determined?
8. How does the company assess stakeholders’ satisfaction with having met
expectations?
Assessment/Alignment
9. How well is the fit between the inputs and the throughputs (strategic
orientation)?
10. How well do the design components align?
ii. Groups and Jobs Level Diagnoses
Inputs
1. What is the level of person-job-fitness?
2. What is the level of member motivation?
3. To what extent do they trust to their leadership?
4. Is the group size/membership rightly enough?
5. Do they have enough resources?
6. Are the members rightly trained? Experienced and interested in the job
assigned?
Design/Job Dimension
7. How clear are the group’s goals?
8. What is the group’s task structure?

9. What is the composition of the group?
10. What are the group’s performance norms?
11. What is the nature of team functioning in the group?
Outputs
12. How is performance measured?
13. How is QWL?
14. How well is the fit between the inputs and the design components?
15. How well do the design components align?
iii. Individual Level Diagnoses
Inputs
1. What is the design of the larger organization within which the individual jobs
are embedded?
2. What is the design of the group containing the individual jobs?
3. What are the personal characteristics of jobholders? Person-job-fitness…
Design/Job Dimensions
4. How much skill variety is included in the jobs?
5. How much task identity do the jobs contain?
6. How much task significance is included in the jobs?
7. How much feedback about results do the jobs contain?
Outputs
8. What are employee attitudes and feelings toward the organization?
9. How do employees perceive their relationship with their employing
organization?
10. How well is the fit between the inputs and the job design components?
11. How well does the job design fit the personal characteristics of the
jobholders?
The key elements of operation in any organizational system are the people, structure,
technology and the environment in which the organizations operate (Rijal, 2012).
People: People make up the internal and social system of the organization. They consist
of individuals and groups. The groups may be big or small, formal or informal, and
official or unofficial. Groups are dynamic and they work in the organization to achieve
their objectives.
Structure: Structure defines the formal relationships of the people in organizations.
Different people in the organizations are performing different type of jobs and they need
to be treated such a way that their work can be effectively coordinated.

Technology: Technology such as machines and work processes provide the resources
with which people work and affects the tasks that they perform. The technology used has
a significant influence on working relationships. It allows people to do more and work
better but it also restricts people in various ways.
Environment: All organizations operate within an external environment. It is the part of a
larger system that contains many other elements such as government, society, market,
and other sub-systems. All of these mutually influence each other in a complex system
that creates a context for a group of people.
2.4. METHODS OF DIAGNOSES
The organizational diagnoses can be performed using a blend of at least four methods – i.
key informant interviews, ii. administration of survey questionnaires, iii. observation of
people, process and overall organizational way of operations, and iv. review of
organizational records that may include documents, accounts, journals, legal papers,
regulatory policies, newspapers, etc.
2.5. VALUES, ASSUMPTIONS & BELIEFS IN OD DIAGNOSES
Organizational Values and Assumptions: The concept of organization development
closely works on a set of three distinctive values and assumptions.
Humanism: This assumption enforces to respect for people, give importance of the
person’s intrinsic worth, strive to create the potential for growth, maintain person-job
fitness, and induce change for individual development.
Optimism: The general assumption is that the people are good and they take
organizational initiatives more rationally. And thus, the progress is possible and desirable
through collective and genuine efforts guided by the philosophy of ‘together, we can.’
Democracy: Promotion of right to be free from misuse of power; justice, and equity;
empowerment; equality and inclusion will drive organization towards the destiny of
success.
Practitioner’s Values and Assumptions: The rigorous involvement in the OD
interventions sharpens expert’s working efficiency and effectiveness. It harmonizes with
prominent skill competencies for open Communication and confrontation. It helps
experts gaining success in empowering people and empowering equity in action. It also
promotes the experts with tangible roles to enhance organizational productivity,
participation and mutual trust.
Beliefs: The entire concept of OD intervention relies on a single belief that change is
only the permanent facet of a living organization and rest of all things are temporary and
they need be changes or transformed at certain point of time, always.

2.6. AGENCIES RESPONSIBLE IN OD
Organization development and change are synonymous and change is almost impossible
without consent and commitment of organizational leadership, its key managers and rest
of employees. Similarly, the role of OD thematic experts is equally important to excel
organizational transformation by means of OD intervention.
Sometimes, the macro environmental requirements also act as one of the most powerful
drivers of OD interventions. For example, if the Government of Nepal effectively
implements the town development policies whereby making it mandatory for all high rise
buildings to have electrical elevators, the builders of such buildings will be compelled to
change their architectural designs by complying the stated norms.
In fact, all the educational institutional facilities have to be easily assessable to all type of
people, including those who have physical difficulties. What, if the Government of Nepal
implements such a policy in near future?
2.7. PROFESSIONAL ETHICS IN OD
An OD interventionist should not promise what he/she cannot deliver, or what is
impossible; promise only what you can deliver.
An OD interventionist should act as a caring partner of the organization. Service
customization, personal selling, teaching and coaching client how to engage in OD is
very a much essential duty of an OD interventionist.
Service first should be the guiding principle of each OD expert, who should not sell
him/herself short for fads. An OD consultant should always think upon the issue that a
consultant should deliver only what the client is willing to buy. But the offer should not
try to replace of the people working out there since long as organization’s loyal internal
members.
Providing training to leadership isn’t necessarily a good solution in OD interventions.
Thus, an OD interventionist should never approach with proposals to train the
organizational leadership for taking up OD initiatives.
2.8. OD IMPLICATIONS
OD implications should be viewed from at least four perspectives, viz. i. implications for
individuals, ii. implications for groups, iii. implications for organizations, and
implications from the perspectives of operating environment.
Individuals: The successful OD experts should be able to listen to the people, support
them in their professional discourses, challenge the failure and resistance, encourage for
innovation, participation and improvement, allow failure to happen – in times required,
remove barriers to change, induce autonomy, inculcate responsibility, introduce high
performance standards and reward systems.

Most individuals believe in their personal growth. Even today, training and development,
promotion to the next higher position sometimes intends to dominate the organizational
philosophy. OD managers need to be more watchful in such cases.
Majority of the people are desirous of making greater contributions to the organizations
they are serving. Achievements of organizational goals are however, subject to
limitations or environmental constraints. It is for the organizations to tap the skills that
are available in abundance.
Following are some of the strategies to be adopted to gear up employee morale through
OD interventions at individual level:
• Ask questions to resolve doubts.
• Listen to superior’s advice.
• Support employees in their venture.
• Accept challenge.
• Leaders should encourage creativity and promote risk taking.
• Give additional responsibility to subordinates.
• Set high standards of quality.
• Empower employees.
• Initiate suitable reward system that are compatible to or more than the industry
norms.
Groups: Let teams flourish, leaders should invest time and effort in developing effective
work teams as team leadership guides and develops interactions toward a goal.
One of the most important factors in the organization is the ‘work group’ around whom
the organization functions. This includes the peer group and the leader (boss). More
people prefer to be part of the group because the group accepts them. Most of the people
are capable of making higher contributions to the group’s effectiveness. But it all requires
formation of effective groups.
Following are the strategies required to be adopted for group development based on the
above assumptions:
 Invest in training and development of the group. Money and time spent on it is an
investment for the organization. Leaders should also invest in development of
skills and thus help create a sound position of organizational climate.
 Let the team flourish. Teams are the best approach to get the work done. Apart
from the above teams enjoy emotional and job satisfaction when they work in
groups.
 Leaders should adopt team leadership style and not autocratic leadership style. To
do this, jobs should be allotted to the team and not to the individual/s.
 It is not possible for one individual (leader) to perform both, the leadership and
maintenance functions. It is therefore necessary for the team members to assist
leader in delivering his or her duties.
 Groups should be trained in conflict management, stress management, collective
decision-making, collaboration, and effective interpersonal communication. This

will improve organizational effectiveness. Empowerment of groups is the corner
stone of the successful organizations.
 Leaders should pay adequate attention to the feelings of the employees. It should
be understood that suppressed feeling and attitudes adversely affect problem-
solving, personal growth and job satisfaction.
 Development of group cohesiveness is equally important to make a group more
effectively functional.
Organizations: People make the workplace, so they are the most precious assets of it.
Encourage cooperation and competition; induce quality work cultures and practices;
provide functional autonomy; power and position to the deserving people, who in turn,
will give the results in the form of performance.
Some of the useful strategies to be opted to make organizational implications more
effective include the following:
 Create and promote organization-wide learning culture.
 Adopt win-win strategy for a sustained organizational growth.
 Create cooperative dynamics rather than competitive organizational dynamics in
the organization.
 Try to meet and exceed the needs and aspirations of the employees in the
organization. This leads to greater participation of the employees. Organizations
should adopt developmental outlook and seek opportunities in which people can
experience personal and professional growth. Such orientation creates a self-
fulfilling prophecy.
 People must be treated with due respect and considered important. The credit of
success must be given to the employees unconditioned.
 Promote organizational citizenship.
In real business, it is possible but not so easy to create organizations that are humane,
democratic and empowering on one hand and high performing in terms of productivity,
quality of output, profitability, and growth on the other hand. It is the responsibility of
every entrepreneur to ensure that the needs of the society are met.
Environment: The organization’s vision should align with the environmental needs.
Resource arrangement for the organization resources should reciprocate the
environmental expectations. The institutional development should also take into account
the social expectations and deprivations. Supply of technology and other resources should
not affect the society adversely; rather it should create a number of opportunities to the
society.
Unit-end Exercise
1. What does it mean by organizational diagnoses? Discuss the basic concepts
underlying organizational diagnoses.
2. Discuss briefly the Wisebord’s Six-Box Model of organizational diagnoses.
3. Discuss briefly the various levels of organizational diagnoses and different
concerns to be accomplished while performing diagnoses at these levels.

1. Who are the agencies responsible for the evolution and development of OD in
organizations? And why? Discuss.
2. How do you observe the significance of the use of OD interventions in present
Nepalese public and private institutions? Discuss with relevant examples to
elaborate on what can be done to transform our organizations.
3. Write short notes on:
a. Values, assumptions and beliefs in OD
b. Professional ethics in OD
c. OD implications

UNIT III: ORGANIZATIONAL CHANGE
Learning Objectives
1. Discuss the meaning, importance and classifications of organizational change
2. Recall the basic change activities, and learn how to motivate change in
organizations
3. Understand how to create a vision, core ideologies, and envisioned future
4. Learn to develop and gain political support
5. Discuss how to manage the transition, sustain the momentum, and develop impact
of organizational change in business
6. Recall the managerial challenges in ODC, and learn the HR implications of ODC
3.1. MEANING OF ORGANIZATIONAL CHANGE
Change is a structured approach to shifting or transitioning individuals, teams,
and organizations from a current state to a desired future state. It is an organizational
process aimed at helping employees to accept and embrace changes in their current
business environment.
Organizational change may happen at two orders – the first order change that makes
moderate adjustments, and the second order change that aims to reinvent, reengineer, or
rewrite.
Organizational Change: Change in an organizational setting refers to the overall nature
of activities, for example, their extent and rate that occur during a project that aims to
enhance the overall performance of the organization. The activities are often led by a
change agent, or person currently responsible to guide the overall change effort. The
activities are often project-oriented (a one-time project) and geared to address a current
overall problem or goal in the organization.
Organizational Development (OD): This phrase refers to the evolution of the
organization during the overall organizational change activities. For example, evolution
of its members to be able to resolve a major problem, achieve an overall project goal
and/or achieve overall organizational goals. Organizational development is an outcome of
organizational change activities.
In other words, OD is a system-wide application of behavioral science knowledge to the
planned development and reinforcement of organizational strategies, structures, and
processes for improving an organization's effectiveness.
An OD system values respect for people, trust and support, power equalization,
confrontation and wider organization-wide participation.
An ODC intervention serves for managing employee turnover, keeping organizational
operations up to date, promoting product or service innovation, managing organizational
growth and diversification, improving work processes, address operational and strategic
problems, promoting new income stream, improving overall operational and product or
service quality, and enhancing organization-wide work efficiency.

3.2. IMPORTANCE OF ORGANIZATIONAL CHANGE
Effective ODC interventions in place will result in institutional transformation, leveraged
innovation and technological development, enhanced organization-wide performance,
increased level of felt pride among all stakeholders, motivated and happy workers, and
efficiency of work at all levels. For these all reasons and beyond, change plays a crucial
role in an organization.
Effective implementation of organizational change helps organizations to be not only
more innovative, but also it helps them for cost-cutting, taking preemptive move,
responding to changing needs of consumers, and fulfilling environmental requirements
and expectations of overall stakeholders.
Change gears up with more confirmed organizational sustainability, growth and
diversification – all important pre-requisites for globalization of a firm and its offerings.
3.3. KEY FORCES FOR CHANGE
Globalization and national macro environmental change involves technological,
economic, political, and cultural exchanges made possible largely by advances in
communication, transportation, and infrastructure developments within the country and
abroad. For example, Nepal’s accession to WTO has resulted in Nepalese enterprise
systems to upgrade their system capacity and technologies so as to be able to compete in
a more competitive global operating environment.
Technological change is the term that is used to describe the overall process of invention
innovation diffusion. Any change in existing technology that is in use of a firm, will lead
to a number of process as well as structural changes in the organization so as to take
benefit of newly emerging and developing features of technology.
Knowledge management is a concept in which an enterprise consciously and
comprehensively gathers, organizes, shares, and analyzes its knowledge in terms of
resources, documents, and people skills.
An important part of knowledge management is effectively managing organization-wide
cross-departmental collaborations. Use of appropriate technology and applications such
as a virtual private networks, VoIP, e-mail, social networking websites such as Facebook,
and even company sponsored blogs are such examples.
Similarly, change in consumer attitude and preferences will lead to numerous changes
in an organization so as to get intact with changing life of consumers or users of the
market offerings of a firm.
3.4. CLASSIFICATIONS OF ORGANIZATIONAL CHANGE
Basically, there are two bases of classifications of organizational change – i. planning,
and ii. order and magnitude of change.

Change vs planned change
Both of them are concerned with making things different. Change inevitably happens to
all organizations. Planned change involves changing activities of the organizations that
are intentional and goal oriented. The focus of planned change is primarily on intentional
goal-oriented organizational change.
Non-planned change is rather forced or situational. For example, the cigarettes
manufacturing companies in Nepal are now forced to change their promotional strategies
following a legal complication in promoting tobacco-based products.
Planned change may be considered as an organization’s internal policy of developing its
products or services, expanding its coverage by product or market, and overall systemic
growth at institutional level.
Non-planned change may be referred to as real-time response to unexpected changes in
the operating environment of the firm.
Order and magnitude of planned change
Planned change can also be viewed from the perspectives of different order and
magnitudes. They are:
First-order change: It is linear and continuous. It implies no fundamental shifts in the
assumptions that organizational members hold about the world. Improving or further
smoothing an ongoing system is an example of first order change.
Second-order change: As against first order change, it is multi-dimensional and brings
in organizational re-engineering and rewriting of organizational approaches to its
business. Replacement of an existing technology with a new one is an example of
second-order change.
3.5. RESISTANCE TO CHANGE
It is the general tendency of human beings to resist change, no matter how much
beneficial the program is. It is always difficult to implement change programs. Almost all
organizational change efforts face one or more forms of resistance to change. In other
words, resistance to change appears to be a natural and positive reaction to change.
The main sources of resistance to change are:
Individual: Habit, security, economic factors, fear of the unknown perception, and
selective information processing.
Organizational: Threats to established resource allocation, threat to established power
relations, structural inertia, limited focus of change, group inertia, and threat to expertise.
Again, there are two key forms of resistance to change -- overt or immediate, and implicit
and deferred. An overt or immediate resistance refers to the state of immediate voicing
complaints, engaging in job actions. On the other hand, implicit or deferred resistance
creates loss of employee loyalty and motivation, increased errors or mistakes, increased

absenteeism as a result of stagnated organizational operations. Deferred resistance clouds
the link between source and reaction.
Overcoming Resistance to Change
1. Education and Communication: Show the effect the logic behind the change.
2. Participation: Promote employee participation in the decision making process of
the organization; it lessens the level of resistance.
3. Build support and commitment: Counseling, therapy, or new-skills training.
4. Implementing change fairly: Be consistent and procedurally fair to implement
change.
5. Manipulation cooptation: Spinning the message to gain cooperation.
6. Selecting people who accept change: Hire people who enjoy change in the first
place.
7. Coercion: Direct threats and force when essential.
3.6. MANAGING CHANGE ACTIVITIES
In organizations, the change activities may take up different forms and routes. The study
of such activities can be made more systematic by exploring the unit on which it occurs
and the procedural systems how it occurs.
Change may occur on individuals, groups, organization’s structural systems, operating
procedures, products or services, inbound and out-bound logistical systems, and different
functional strategies of the firm. Such changes may be witnessed in the form of
transformation of organizational thrusts, structure and design over time, introduction of
employee training and development programs, leadership grooming, change in line of
products or services in offer, change in price, re-branding, re-packaging, technological
upgrading or introduction of newer technologies, and so on. These changes are inevitable
for organizational innovation and prosperity.
Following are more commonly performed change related activities in organizations:
1. Change in organizational governance
2. Organizational restructuring or reengineering and innovation
3. Strategic shifts
4. Product or service innovation, development and modifications
5. Change in operating system, technology and environment
6. Change in approaches to responding to environmental stakeholders
Whatever the level of change be, it is a more systematic endeavor and requires a coherent
set of initiatives, which are discussed as follows:
Step I: Perform organizational diagnoses and collect data or information pertaining to
different change requirements of the organization at different levels – individual, group
and organizational levels
Step II: Process the collected data and prepare information on needs for change

Step III: Estimate the change requirements, its procedures and organizational
affordability and sustainability by means of change
Step IV: Prepare a plan of action to execute the change.
Step V: Implement the plan of action on change and closely supervise and monitor the
process of change in action.
Step VI: Evaluate the impact of change and produce feedback for further improvement.
3.7. MOTIVATING CHANGE IN ORGANIZATIONS
To motivate effectively the intensity and diversity of change with lasting impact, the OD
interventionists and top management has to work closely with an assurance that the entire
organizational mission is effectively motivated.
For this, the first and foremost requirement is that each member associated in the process
of change has to have a feeling of ownership of everything that has been undergoing
change.
It requires high level of commitment of the top management to motivate organization-
wide change process. Top management has to take accountability of each failure and give
credit to the implementing agencies in each success they achieve. Such a practice boosts
morale of the people on the assembly line.
The change leaders should be swift enough to respond with change interventions so that
all members involved will remain motivated and impressed to be intact with the change
system at large.
There should be adequate reward and development provisions at each level of
organizational life for gearing up change process as a life-long institutional proposition.
Management should give priority to more innovative and newer ideas and procedural
advents so as to keep up high morale of all change agents involved in the system.
Building a culture of adequate celebrations on each success and innovation will help
motivate change agents.
Inducing a system of two-way and multi-way communication on change requirements,
and responding in time with effective change initiatives will further motivate the entire
organizational mission for transformation.
3.8. CREATING VISION FOR CHANGE
Setting the organization’s vision, core ideologies and envisioned future provide the
organizational citizenship. For this, the top management has to work closely in
collaboration with the OD interventionists and set organization’s mission, vision,
objectives, goals, strategies, plan of action, measures and task initiatives. In fact, these all

collectively communicate the organizational thrusts which are also referred to as
envisioning the organizational future.
Figure 3.1: Crafting Organizational Thrusts
STRATEGIC THINKING: DOWN TO ACTION
Mission
Vision
Goals
Objectives
Measures
Why we exist
Where we want to reach
Indicators and monitors of success
Desired level of performance
and timelines
Planned Actions to achieve objectives
O1 O2
AI1 AI2 AI3
M1 M2 M3
T1 T1 T1
Specific outcomes expressed in
measurable terms (NOT activities)
Strategic Plan
Action Plans
Evaluate Progress
Targets
Initiatives
What we must achieve to be successful
5
Setting a mission means establishing the reason of existence of an organization, whereas
the vision intends to communicate a desired destination of success intended in course of a
defined period of institutional life. The organizational goals and objectives communicate
the tangible results and purpose of achievements to be made in course of time. Initiatives
are the action programs and measures are the benchmarks of measuring the intended
performance. Finally, the targets are the time-bound quantified results expected at all
levels of operation. In course of time, an organization may witness change in all elements
of its strategic thrusts on its way to maintain high performing and innovative institutional
status.
3.9. DEVELOPING & GAINING POLITICAL SUPPORT
An organization is a social institution and will have deeper social roots, so does the
politics that governs the society and nation at large. In this context, a firm has to be able
to receive ample political support for its development and prosperity.
Creating sound functional ties with the society and the influential members of the society,
contributing for social welfare, providing with value-laden services to the customers,
maintaining financial transparency and paying taxes in time, taking accountability of each
functional failure, involving local people in organization’s quality circles, are giving
priority to the local resources are some of the strategies to be opted to win and sustain
political support.
Additionally important is to do the business which is permitted by political legal system,
complying with social values and norms, initiating with environment friendly operations,
and partnering with development missions in the communities helps organizations gain
and retain political support at different levels.

3.10. MANAGING TRANSITION
Organizations undergo changes due to a number of internal and external reasons. The
competitors will be closely watching each development under transition and they will
likely act swiftly creating quick adverse effect on organization. Thus, we should be
tactful, intelligent enough and politically correct in managing development under
transition.
Any violation of existing laws of the land, inability to meet and exceed the stakeholder
expectations and failure to win the investor and shareholder trust may result in
unexpected pressure and resistance against ODC mission.
Timely communication of the reason of change under transition, wider participation,
gaining the consent of the key stakeholders on change initiatives are some of the
strategies to be opted so as to achieve wider stakeholder support.
Some examples of such transitions include socio-economic and political revolutions in
the countries of firm’s operation, change in company’s governance system, change of top
management, merger and acquisition, national calamities, etc.
3.11. SUSTAINING MOMENTUM
A well thought change initiative will create a powerful momentum of overall
organizational development and prosperity at its various levels across the units and
specializations. Once a change is effectively initiated, the organization receives another
height of its momentum. The earlier established basic requisites turn to be absolute as a
result of new attainment of the height. Now, it is a crucial job of an OD interventionist to
closely observe the cross effect of each momentum and help the top management in the
process of upgrading the people, process, technologies and institutional strategies
accordingly so as to sustain the momentum of institutional development.
Sustaining momentum is a very vague and multi—functional task as change may create
impact on any number of people, departments, operating systems, products and services,
markets served, buyers and marketers, and beyond.
Wider collaboration, continuous systems improvement, organization-wide commitment
to change and innovation, operation focused approaches to organizational development
will serve instrumental in maintaining momentum of success.
3.12. INITIATING IMPACTFUL ODC INITIATIVES IN ORGANIZATIONS
Any change we make today should have long term effect on organizational services for
long run. For this reason, an OD interventionist should always think on following
considerations:
1. An OD intervention initiated for organizational and business or service
development should have least impact on its overall cost of operation.
2. Any change initiated in one department should have positive cross-effect to not
only to this department, but also to the rest of the departments.

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